National Credit Act leniency needed

Another high profile personality in the Cape property sector has now said that until there is an easing of the National Credit Act criteria which the banks apply to their mortgage bond lending and a greater willingness to accept risk, there can be no hope of the property sector (or indeed the economy) once again flourishing.

Mark Marks, a director of the Western Cape Institute of Estate Agents and a consultant to Permanent Trust, says that right now both the residential and the commercial property sectors can offer good bargains to those buyers with cash. This, he said, reflects the difficult conditions being experienced – a large percentage of potential buyers are simply unable to get bonds and are forced to continue to be tenants, “which has never been the declared government policy”.

“At present,” said Marks, “we are seeing far too little development because neither the developers nor those who want to buy from them are getting the finance they need – but it is the building sector that, above all, needs to be assisted because it is such a major provider of jobs both on site and in the services and supply sectors, which support all construction work. Assistance from banks to the developers and to potential homebuyers can take the country out of its near recession predicament.

“We at the Institute understand and support the measures to curb reckless lending – but many of us feel that the crack-down has been too stringent and has mitigated against real economic growth. A change in the NC Act would be welcome at this point.”

Article from: www.permanenttrust.com